Yukon’s top judge has slammed a now-defunct mining company for leaving behind yet another environmental mess Canadian taxpayers will be on the hook for.
“This case stands as a painful reminder of the lasting and egregious damage that unscrupulous and unchecked profiteering can bring about in the mining sector,” Yukon Supreme Court Chief Justice Ron Veale wrote.
On Jan. 16, he released the written reasons for his May 2016 decision to approve the Mount Nansen cleanup plan.
BYG Natural Resources Inc. owned 264 claims in the Mount Nansen area, 60 kilometres west of Carmacks, when it abandoned the site in 1999. It formally went into bankruptcy in 2004.
The company left behind 55,000 cubic metres of contaminated soil, 300,000 cubic metres of tailings, and 500,000 cubic metres of waste rock.
BYG was convicted for breaching its water licence in 1999, with the presiding judge at the time likening the company’s approach to “‘raping and pillaging’ the resources of the Yukon.”
“It is in my opinion that an account of BYG’s historical activity should be brought to the attention of the federal and territorial taxpayers who remain fiscally responsible for remediation efforts associated with the contaminated site,” Veale wrote.
But while government officials don’t want to say they disagree with the chief justice, who says this type of mining disaster could happen again, they say the territory now has different mining rules.
Bob Holmes, the director of mineral resources for the Department of Energy, Mines and Resources, told the News mining companies are required to have an approved closure plan before they can start production.
They’re also required to give the government a security payment meant to cover closure and remediation costs.
“Sites are designed for closure now,” Holmes said, adding that mining companies used to simply dump waste rock anywhere, only to realize later they needed to clean up the site.
Remediation and closures have successfully taken place since the new rules came into effect, Holmes said.
He cited the example of the Brewery Creek mine near Dawson City that closed in 2005.
The heap leach mine was properly closed without any cost to the public, he said. The same goes for the Sa Dena Hes mine, 45 kilometres north of Watson Lake.
The Yukon gave the mining company back most of its security — $20 million — while keeping $5 million for ongoing monitoring care and maintenance.
“If the company walked away, the Yukon would have to do care and maintenance,” Holmes said.
Remediation plans and securities are updated every two years.
Mining companies also have an incentive to do ongoing remediation, Holmes said, because it will bring down the cost of their securities.
Currently the territory holds over $95 million in securities for 11 mining projects in the territory.
That’s a lot compared to the mere $4 million the federal government had for the Faro mine, one of the world’s biggest zinc-lead mines when it operated in the 1960s.
The Faro mine has cost Canadian taxpayers upwards of $250 million to date for care and maintenance, and reclamation and closure is expected to cost at least $1 billion.
When the Yukon signed the devolution transfer agreement in 2003, taking over responsibilities for mining, the federal government agreed to bear the costs of several abandoned mines, including Faro and Mount Nansen.
Veale does acknowledge regulations have changed in his decision, but that doesn’t prevent him from offering a frank assessment of the situation.
“It is an embarrassment to Canada, Yukon and the responsible mining community,” he wrote. “It is the hope of this court that this case will provide a valuable lesson to future governments of Yukon and Canada, and the taxpayers who will pay the millions of dollars required to remediate the BYG mine property.”
After its appointment as a receiver in 2004, PricewaterhouseCoopers sold parts of BYG’s claims and assets to the secured creditors. To date there are 56 claims and leases, one surface licence, and one surface lease remaining of the 265 original ones.
Last May, Veale authorized PwC to put out a request for proposal for the remediation plan, which the federal government will pay for.
The remediation plan involves pumping water from the open pit and building a platform out of waste rock in the pit to hold all the contaminated material above the groundwater level. The tailings and contaminated soil would be emptied into the pit, which would be continuously lined with waste rock as it filled up, and then covered.
The buildings and concrete foundations on the site would be demolished, and the valley would be restored.
Remediation will also involve monitoring water discharge from the pit.
-With files from Maura Forrest
Contact Pierre Chauvin at email@example.com